Magnit Opens its First Dark Stores

Krasnodar, Russia (February 11, 2021): Magnit PJSC (MOEX and LSE: MGNT; the Company, Magnit), one of Russia’s leading retailers, has opened two pilot warehouse stores in Moscow that only serve online orders — dark stores.

Dark stores are located in the north and east of the capital and are used for express delivery within one hour. The stores process orders made via Magnit’s own delivery service, and in the near future they will be connected to partner services — Delivery Club and Yandex.Eda.

Until now, Magnit's delivery operated based on its brick-and-mortar stores. Dark stores are expected to enable the Company’s online business to achieve a higher operational efficiency.

The pilot dark stores operate in a ‘mini’ format and have an area of 300 and 400 sq. m. Their assortment differs significantly fr om a standard offline Magnit Convenience store and includes products from the ranges of Magnit Family supermarkets and Magnit Cosmetic drogeries — around 6,000 to 7,000 articles in total. For example, the assortment of dark stores is supplemented with make-up and care cosmetics, beauty and health products, as well as a range of fresh meat, soft cheeses, and non-dairy soy drinks. The updated offer better meets the preferences of Magnit's Internet customers, who buy more products and choose more expensive options online than offline.

Dark stores also differ from Magnit Convenience stores in terms of appearance: their design is minimalistic, and they have no partitions on the sales floor to speed up order processing. A video surveillance system is used to monitor the quality of order picking. Access to the dark stores is granted only to employees who prepare the orders, as well as delivery couriers.

“These are the first two mini dark stores wh ere we will test the operational processes and determine the optimal model for future scaling in Moscow. In 2021, we plan to open up to 20 such dark stores across the capital. We see a high level of interest from our loyal offline customers towards the online channel, as well as an influx of a new audience that has never shopped in Magnit before. To meet the needs of this category of customers, we are working on properly adapting our offering for online and constantly improving the customer experience,” — said Florian Jansen, Magnit’s Deputy CEO and Executive Director.

Magnit began developing its foodtech capabilities in 2020 in cooperation with specialized partners, joining forces with Delivery Club at the end of August 2020 and with Yandex.Eda at the end of September. In November, the Company launched its own Magnit Delivery app offering express delivery in Moscow, as well as its own regular delivery service working from Magnit Family stores in Krasnodar. So far, all of the projects are at the pilot stage, but their dynamics for the first months of operation turned out to be much better than expected. By mid-December 2020, Magnit was already fulfilling about 7,000 orders a day, and the average ticket for Magnit's own delivery was about 1,600 rubles.

Magnit opens its first dark stores